What is Consequential Damage in Insurance?
The concept of Consequential Damages often confuses many, leading to frustration during claims due to its unclear nature. Let’s revisit the basics: What exactly are Consequential Damages?
In simple terms, consequential damage refers to when an unexpected event triggers a chain reaction of other events, resulting in damage that isn’t directly caused by the initial event. Sounds confusing?
Consequential Damages in case of Mobiles
One day, a customer called in distress after his new phone was stolen. What upset him more than losing the phone was losing his honeymoon photos. 😞 While our mobile insurance covers phone theft, it doesn’t cover the loss of personal data, contacts, or other important documents stored on the device. That’s why it’s essential to regularly back up your data and contacts.
Though we all know not to save passwords on our phones, many people still do for convenience. Unfortunately, thieves are skilled at finding such information.
If your phone gets stolen and your accounts are compromised (touchwood), that’s an example of consequential loss. To prevent this, make sure to remove sensitive data from your phone today.
Consequential Damages in case of Car
Picture this: you’re in Mumbai, enjoying a beautiful day, and you leave work early, confident that your car will get you home safely. Suddenly, you get a flat tire, but no worries—you have a spare. Then, out of nowhere, it starts pouring rain (as Mumbai weather often surprises), and your engine gets waterlogged, causing damage. This is an example of consequential damage.
One common misconception is that engine damage, unless caused by an accident, isn’t covered under a standard comprehensive car insurance policy. To cover engine-related issues, you need an Engine Protection add-on.
Now, imagine your car is in an accident and needs towing. During the process, the towing crew accidentally scratches the bonnet. These towing-related damages are also considered consequential damage and typically aren’t covered by car insurance. The key takeaway: always be cautious when the tow hook is placed under your car.
Consequential Damages in case of Travel
You’re heading for a business trip, but unfortunately, you miss your flight. While your travel insurance covers the missed flight, if missing it leads to missing an important meeting, resulting in a business loss, that would be considered consequential loss. The takeaway? Always ensure you have enough time between connecting flights to avoid such situations.
Consequential Damage in case of Property
You have insurance for your shop and its contents. If, unfortunately, a fire breaks out (which we hope never happens), your policy will cover the damage to the shop and its contents. However, any business losses due to the shop’s closure won’t be covered. To minimize downtime, consider keeping your financial records on a cloud drive to resume operations quickly.
This article may not be the most comforting, as it highlights potential issues we might not be able to help with legally. However, we aim to guide you on how to reduce and prevent these losses. Our goal is to keep things transparent for you.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Thezipco is not promoting or recommending anything here. Please verify the information before making any decisions.
